Why is the Influencer Industry so Challenging?
Last year I was traveling around Asia, and when I was in Myanmar I noticed that very few people speak English. I remember one day my phone died so I had to explain some locals where I wanted to go. Without much of a choice, I happened to speak to a guy that barely spoke English and he said he knew where that place was. So he found me a guy with a scooter to get me there. As I expected it, we got lost. So what I did next was to find an international hotel and ask for help there. In my opinion, this experience was a very good example of what goes on in the influencer industry.
Brands have a considerable disadvantage
Most brands have lost the communication process. Influencers have taken over control of communication—they count with two powerful tools that are critical in today’s economy: attention and trust. Under these circumstances it’s very challenging for brands decide to use influencers to grab the attention of the market. There is a communication advantage controlled by influencers in the industry that is terribly difficult for brands to overcome.
Some sites make a great job sharing information on the benefits of collaborating with influencers that are very helpful in providing general advice, however. Even after reading them, brands wouldn’t necessarily be aware of some of the key takeaways that can be pretty significant. And when it comes to finding the right influencers brands usually have a hard time.
Very few barriers to entry and little effective measurements
Fueling this situation are the lower barriers to entry and very little effectiveness in ROI terms. Becoming a celebrity is hard, but anybody can be an influencer (at least call themselves that). And the same goes for talent agencies that don’t want to be left behind. So with this scenario some TV players want to enter into game—they inundate the industry with TV practices where they put traditional marketing into practice. Thus, with that mindset in play, marketers find determining ROI to be a top challenge. So as you can imagine, it’s like the wild wild west where influencers and agencies fight to get their slice of the influencer industry cake. So this is what you get:
Attention and trust advantage + sloppy metrics + few barriers to entry + TV mindset = the influencer industry
These industry characteristics are not necessarily unique to influencers. Similar characteristics exist in the Digital Advertising Industry. Its biggest problem? Companies are paying for impressions that no one sees. IAB published in a study where they said that more than $4 billion is lost due to non-human traffic. In addition to that, there are countless frauds within the industry where media-buyers overcharge advertisers lying about the costs of the placements.
My best advice? Find an agency that is willing to provide some context around this complex industry and even educate you about its nuances. Make sure that the influencer/agency you’re dealing with has long term interest to you so that you reduce the risk of them trying to cash out. Remember that the key is to know how to measure results, not to measure the click or views on the way to the results. Make sure you learn enough from this site or other online sources and ask important questions which hopefully help you to avoid long-term mistakes. You can read our free ebook on how to create successful collaborations with influencers.
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